In contracts between Vietnamese and Chinese companies, the dispute resolution clause decides where disputes are heard, under which law, and whether the award can be enforced in the other country. Three strategic decisions must be locked in at drafting: (1) the governing law — Article 683 of the 2015 Civil Code; (2) the arbitral institution — VIAC, CIETAC or SIAC, under the Law on Commercial Arbitration 54/2010/QH12; and (3) two-way recognition and enforcement of awards between Vietnam and China — the 1958 New York Convention plus Articles 424–430 and 459 of the Civil Procedure Code.
1. Decision 1: Governing law — always state it (Article 683, Civil Code 2015)
Under Article 683.1 of the Civil Code 91/2015/QH13 (Part Seven, Articles 664–683 on the law applicable to civil relations with foreign elements): “Parties to a contractual relationship may agree on the law applicable to the contract, except in the cases provided in Clauses 4, 5 and 6 of this Article.”
- No agreement → the law of the country with the closest connection applies (Article 683.2: sale of goods → the law of the seller’s place; services → the law of the service provider’s place);
- Mandatory exceptions (Article 683.4–6): immovable property → the law of the place where the property is located; the consequences of the choice of law must not contravene the fundamental principles of Vietnamese law.
Practical advice: always state the governing law. Leaving it blank means gambling on how a court or tribunal will determine the “closest connection”. Choosing Vietnamese law + a Vietnamese seat is advantageous for enforcement in Vietnam; choosing Chinese law with proceedings in Vietnam means the winning party must prove the content of foreign law — costly and risky to interpret.
2. Decision 2: The arbitration agreement — in writing, with 6 minimum elements
Under Article 16 of the Law on Commercial Arbitration 54/2010/QH12 (the correct code is QH12 — the XIIth National Assembly; amended by Law 81/2025/QH15, effective 1/7/2025), an arbitration agreement must be in writing. An agreement is void in the cases listed in Article 18, including: the signatory lacked authority; the dispute is not arbitrable; the agreement’s form is improper.
A minimum arbitration clause must contain 6 elements:
- (a) All disputes arising out of or in connection with the contract are resolved by arbitration;
- (b) A specific arbitral institution (VIAC / CIETAC / SIAC) + the applicable procedural rules;
- (c) The seat of arbitration;
- (d) The language of the proceedings;
- (e) The number of arbitrators;
- (f) The law governing the substance of the contract.
“Pathological clause” traps to avoid
- “Disputes resolved at VIAC, seat of arbitration in Beijing” — contradiction between the institution and the seat;
- “Arbitration in China” in general terms, without naming CIETAC, BAC or SHIAC — an invitation to jurisdictional disputes from day one.
3. VIAC vs CIETAC vs SIAC: choosing on 5 criteria
VIAC (Ho Chi Minh City/Hanoi): advantageous when Vietnamese law applies and enforcement is in Vietnam. A VIAC award is a Vietnamese arbitral award → enforced directly in Vietnam, with no recognition procedure.
CIETAC (Beijing): the CIETAC Arbitration Rules 2024 (effective 1/1/2024, replacing the 2015 Rules) include notable mechanisms — early dismissal of manifestly meritless claims; joinder and consolidation of cases; disclosure of third-party funding; emergency interim measures. Drafting note: absent agreement, the default language of proceedings may be Chinese — check the current rules and fix the language in the clause. A CIETAC award is a foreign award vis-à-vis Vietnam → recognition in Vietnam follows Civil Procedure Code Articles 424–430.
SIAC (Singapore): the “neutral” choice when neither party trusts the other’s seat. Singapore, Vietnam and China are all members of the 1958 New York Convention.
4. Decision 3: Two-way recognition and enforcement of awards, Vietnam ↔ China
CIETAC award → Vietnam: based on Article 424.1(a) of the Civil Procedure Code 2015 (both countries are members of the same international treaty) + the procedure in Articles 425–430; grounds for refusal are limited to Article 459 (corresponding to Article V of the New York Convention). Risk warning: one cited study records that over 36% of foreign arbitral awards were refused recognition in Vietnam during 2012–2019 — a figure illustrating real risk, not a current rate.
VIAC award → China: through the 1958 New York Convention. Vietnam acceded on 12/9/1995 (effective in Vietnam 11/12/1995) with two reservations: commercial disputes only, and reciprocity. China acceded on 2/12/1986 (effective in China 22/4/1987) with corresponding reservations. Since Vietnam is a Convention member, China’s reciprocity reservation is satisfied. Caution: China operates an internal control mechanism before a local court refuses to recognize a foreign arbitral award (reporting to the Supreme People’s Court) — the details belong to Chinese procedural law, so engage local counsel in China for enforcement.
5. Two model clauses
Model 1: VIAC + Vietnamese law (best for enforcement in Vietnam)
Any dispute arising out of or in connection with this Contract, including disputes regarding its validity, interpretation or termination, shall be resolved by arbitration at the Vietnam International Arbitration Centre (VIAC) in accordance with the VIAC Arbitration Rules. The seat of arbitration shall be [Ho Chi Minh City/Hanoi], Vietnam. The language of the arbitration shall be [Vietnamese/English]. The arbitral tribunal shall consist of [1/3] arbitrator(s). This Contract shall be governed by the laws of Vietnam.
Model 2: CIETAC/SIAC + Chinese law or a neutral law (best when assets are in China)
Any dispute arising out of or in connection with this Contract shall be resolved by arbitration at [CIETAC, Beijing, China / SIAC, Singapore] in accordance with the arbitration rules of that institution. The seat of arbitration shall be [Beijing, China / Singapore]. The language of the arbitration shall be [Chinese/English]. The arbitral tribunal shall consist of [1/3] arbitrator(s). This Contract shall be governed by [the laws of China / the laws of ___].
Pre-signature review checklist
- The governing law is stated (Article 683, Civil Code 2015) — never left blank;
- The arbitral institution is named specifically (not “arbitration in China” in general);
- The institution and the seat are consistent;
- The language, number of arbitrators and applicable rules are fixed;
- The enforceability of the award where the losing party’s assets are located has been assessed;
- The person signing the arbitration agreement has authority (to avoid voidness under Article 18 of the Arbitration Law).
Disclaimer: these two models are for reference only and must be reviewed by counsel for each specific transaction; they do not replace legal advice.
6. Frequently asked questions
What if no governing law is stated?
The court or tribunal will apply the law of the country with the closest connection (Article 683.2, Civil Code 2015) — an unpredictable outcome, so always state it.
Can I choose Chinese law with VIAC arbitration?
Yes — parties are free to agree. But for enforcement in Vietnam, the winning party must prove the content of Chinese law, which is costly and risky to interpret.
Is a CIETAC award directly enforceable in Vietnam?
No. A CIETAC award is a foreign arbitral award vis-à-vis Vietnam and must go through recognition under Civil Procedure Code Articles 424–430.
Is an arbitration agreement by email/chat valid?
An arbitration agreement must be in writing (Article 16, Law on Commercial Arbitration 54/2010/QH12); improper form is a ground for voidness under Article 18.
Sources
- Civil Code 91/2015/QH13 — Part Seven (Articles 664–683), specifically Article 683 on the choice of law for contracts;
- Law on Commercial Arbitration 54/2010/QH12 (code QH12): Article 16 (written form), Article 18 (voidness); amended by Law 81/2025/QH15 (effective 1/7/2025);
- Civil Procedure Code 92/2015/QH13 — Part VII: Articles 424–430 (recognition of foreign arbitral awards), Article 459 (grounds for refusal);
- Commercial Law 36/2005/QH11 — Article 5.2 (agreement to apply foreign law and international commercial customs);
- 1958 New York Convention — Vietnam acceded 12/9/1995 (effective 11/12/1995), China acceded 2/12/1986 (effective 22/4/1987);
- CIETAC Arbitration Rules 2024 (effective 1/1/2024); VIAC Arbitration Rules 2017 — consult the full text on each institution’s official website when drafting.
For reference only; not legal advice. This content was drafted by AI and will be quality-checked by the AI Legal Council of FLAT Law Firm before publication review; it is not legal advice from a human lawyer. Regulations may change; please check the current legal texts before relying on this information.
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